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Try to stick to the following plan if you are trying to get out of debt and at the same time stay away from it.

It is important that you should not deal with all kinds of debts at the same time. Focus on those debts that need immediate attention while rest of the debts can wait for some time. Once you know which debt needs the immediate attention, put all your energy and extra income towards it and paying off that particular item. The advantage of concentrating on one particular debt will reap the psychological rewards and you will see progress.

Do not cancel your credit cardsif it has some balance on it. Try to pay off the outstanding balance in full before you go ahead and cancel it. In case, if you close the account before paying the full balance, they will not see you as their existing customer and hence, can forward your account to some outside collection agencies. You might fall under adverse circumstances.

While you are formulating your debt reduction plan, it is important that you don’t build in unrealistic expectations. Create a realistic plan. If you have been used to a strict budgeting, you will have to give some time to change your behaviors, attitudes and habits and see results.

Don’t put your hands on to your emergency funds to take care of other things. You might have kept that fund separate for some other unexpected situation. If you use those funds towards repaying your debts, you will have nothing left in case any unavoidable emergency arises.

It is not good to discuss your plans of action with everyone. You will always hear from different people having different opinions. Even if you discuss with some close people, make sure that you are careful about whom to listen. You are the one person who can best understand your situation. In my case, I tried to follow Dave Ramsey’s snowball method and started paying the smallest debts first to the largest balance. There are people who pay off those debts first that have the highest interest rates. And there are still a few who use a combination of these two methods. Whichever plan you adopt, be faithful to yourself and understand your plan of actions. Don’t mess up things by making rash decisions.

Don’t give your checking / saving account accessto the credit card companies. While most companies are reputed, but you might find a company making unauthorized debits from your account and doing illegal business. It is better to be safe and make online payments provided by your bank or write a paper check.

Do not use a second mortgage to consolidate automobile or credit card debt. If you are considering to sign up with any debt reduction company, make sure that you have gone through the fine prints and understood it thoroughly. I have seen so many people who shift their debts from credit card to mortgage, but because of their reckless spending habits, they end up with mortgage debt and additional credit card debts. And you definitely do not want to risk your home just because of some unsecured credit card debts.

Don’t make any major purchases while you are trying to be debt free. You can reward yourself happily when you are completely debt free. It does not make sense that you have paid off two different accounts and now you are looking to buy a television set that could have waited for some more time. Reward yourself when you are completely debt free.

Don’t fall into arguments with your family members. They are the ones who will stay with you for the rest of your life. Monetary problems are temporary and you don’t want to ruin your personal relations just because of some financial problems.

I have been in debts and I have given my best while I was on my way of coming out of it. These were some of the important things I kept in mind. I thought it will be a good idea to bring these points in front of you so that you can also share it with others.